JASPER — A chemical company's plan to mine phosphate on 14 square miles of wetlands near the Suwannee River has touched off a dispute of dollars vs. environment that is rocking much of North Florida.

At stake is the economic health of three counties and the future of the state's best-known river.

A hearing on the proposal by Occidental Chemical Agricultutral Products drew 1,100 people last week to this small city just south of the Georgia border.

By comparison, if a similar portion of the population in the Orlando metropolitan area went to a meeting, the crowd could not be seated in two Orlando stadiums.

''You're talking about people's bread and butter,'' explained one of the dozen deputy sheriffs who directed traffic.

Unlike most environmental uproars, this one does not involve a large company forcing something on residents that they don't want. Occidental, known as Oxy here, is welcomed by most people in Hamilton, Columbia and Suwannee counties.

Supporters say Occidental has been a conscientious corporate neighbor for 20 years, now paying $50 million in wages a year to 2,000 people.

The people say they fished and hunted on the Suwannee with their grandfathers, and the fishing and hunting is just as good now, 20 years after Occidental arrived to dig phosphate.

Before Oxy came ''the town of White Springs could be described as having one foot in the grave and one foot on a banana peel,'' said town Mayor John Graham. ''The citizens of White Springs say let the mining continue, let the reclamation continue and above all let the prosperity continue.''

Critics of Occidental say the company destroys thousands of acres of land, and makes unsubstantiated claims about its ability to restore it.

Making matters worse, they complain, is that much of the phosphate is sent to the Soviet Union. Phosphate is a vital portion of fertilizer mixes.

Some residents say Occidental is able to get its way because of the economic stranglehold it has over the region.

''This community is held economic hostage to a single company,'' said Stephen Williams, who rents canoes on the Suwannee. ''If they don't do as they are told, they are out of a job.''

Which portrayal of Occidental is correct?

''They're both right,'' said one state official. ''How is that for a middle-of-the-road position?''

Occidental is undeniably the most important company in the three counties. If the company's mining proposal is accepted by state and federal regulators, there will be plenty of jobs for at least the next 20 years, say Occidental officials. If not, they say, the company will be forced to pull out of the area.

''What people construe as threats are simply the facts,'' said company spokesman Stan Posey in White Springs. ''We don't hold anyone hostage here.'' Wetlands are important, say Occidental officials, but their importance needs to be kept in perspective.

Each acre of mined wetlands means $56,000 in worker pay to the community, says Wes Atwood, the company's environmental specialist.

A state tax on mining operations is used to buy environmentally sensitive land, and Atwood says taxes on one acre of mined land could buy four acres of other wetlands along the Suwannee.

Occidental also is a major contributor to local governments through property taxes, which, for example, finance 11 percent of the Hamilton County school budget.

''Mined land looks ugly to some people but to others it looks like payroll,'' said state Sen. Joe Carlucci, D-Jacksonville, a supporter of the company.

The people here are angered by what they perceive as middle- and upper- class environmentalists from other areas of the state threatening their one chance at making a decent salary. Lake City Mayor T. Gerald Witt called them the ''fanatical lunatic fringe.''

But environmentalists say the residents are selling the long-term health of their natural resources for short-term financial gain.

Counties at the headwaters of the river have no right to foul the Suwannee for those downstream, they argue.

''What about 20 to 25 years from now'' when the land is fully mined? Gainesville environmentalist John Mahon asked at the meeting. ''Do you think Occidental is going to set up a relief agency for you after they leave?''

Occidental wants to mine the wetlands for 20 years along with another 26 square miles of dry land. The company is trying to get required permits from the Army Corps of Engineers and the Florida Department of Environmental Regulation.

The wetlands area is not directly connected to the Suwannee, which rises from the Okeefenokee Swamp in Georgia and flows 265 miles through Florida to the Gulf of Mexico. It is the second-largest river in Florida and one of the least disturbed.

The wetlands that Occidental wants to mine are isolated, on or near creeks that feed water into the Suwannee.

The phosphate usually is about 25 feet under the surface, and is removed by stripping off the top layers of muck and soil. After processing it is sent all over the world, including the Soviet Union.